"There are a lot of naysayers out there who say that reform doesn't ever have a chance. And the fact is that we face an uphill battle, but we've got to keep the focus on people," Donovan said at the Federal Legislative and Political Forum at the Realtor Party Convention & Trade Expo in Washington.

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The Senate Banking Committee is set to mark-up legislation Thursday from Chairman Tim Johnson (D-S.D.) and ranking member Mike Crapo (R-Idaho), after a delay last month when senators requested more time to review changes.

The bill would end Fannie Mae and Freddie Mac, replacing those entities with a single agency backed by the housing industry.

The bill isn't likely to receive a vote on the Senate floor before the midterm elections, and several top Banking Committee Democrats are expected to oppose the legislation, claiming it doesn't do enough to boost affordable housing or help underserved borrowers.

Donovan acknowledged concerns over the compromise legislation, but said it was the best vehicle available to reform the housing market.

"Now is this bill perfect? Of course not," he said. "There are things that all of us would change. But make no mistake, it represents progress towards building a healthier market for generations to come.”

In his remarks, Donovan did not address the decision by officials at the Federal Housing Finance Agency (FHFA), which regulates Fannie and Freddie, to nix plans that would have forced the mortgage giants to lower limits guaranteed loans.

Donovan's remarks came as FHFA Director Mel Watt detailed his agency’s plans at a housing forum hosted by The Brookings Institution. Watt said the FHFA's policy change was necessary to revive a sluggish housing market.

Donovan also unveiled a new HUD four-year pilot program dubbed "Blueprint for Access" aimed at helping first-time homebuyers and improving access to credit for underserved borrowers. He said he hoped the program would guide those consumers to financial counseling services and better loan terms.